melannen: Commander Valentine of Alpha Squad Seven, a red-haired female Nick Fury in space, smoking contemplatively (Default)
melannen ([personal profile] melannen) wrote2019-01-29 12:18 pm

on swindles and fandoms

so [personal profile] cesperanza's post about Multi-Level Marketing and monetizing fandom is still going around, and I keep wanting to put mostly-side-issue long comments on other people's posts, so here they are here instead.

I commented on the original post about how I felt like the correct comparison was not MLMs to fandom patreons (etc), but pyramid schemes to predatory publishers. The people who tell you how your novel will be a best-seller now that they've discovered your genius, and all you have to do is give them thousands of dollars for them to ship you thousands of copies of a badly-edited, badly-bound book for you to sell to your friends and family, they're the ones coercing writers to destroy their own social networks for other people's profit.

And in a lot of ways, the fandom monetizing methods actually inoculate against this - a member of a fan community who know about things like patreon and crowdfunding and kindle originals and legit self-publishing, who is friendly with other pro authors, who knows the histories of other people who've made the transitions and can chat with other people in the process and has things like beta-readers and knows that there's more to getting readers than just writing a thing - that person is way less likely to fall victim to a predatory publisher.

There's a lot of people misunderstanding MLMs in this discussion, too. Multi-Level Marketing has come to be used as a euphemism/synonym for pyramid scheme because calling something a pyramid scheme in the press is technically defamatory in the US unless you can prove it is one by the legal definition. But not all MLMs are pyramid schemes, only most of them (and nearly all of the trendy flash-in-the-pan ones).

An MLM is an organization where people recruit new people into the organization, and they get a percentage of their recruits' revenues in exchange.

In a classic pyramid scheme, this is literally all that happens. Person A says, "If you join and give me a $5 membership fee, you can recruit new people, and they'll give you their $5, and everyone they recruit will give you a percent of their $5, and before you know it you'll have hundreds coming in every day from new recruits far down the line, just like I do!" In that kind of scheme, as soon as new membership fees stop flowing in, the entire thing collapses.

Pyramid schemes are illegal in the US, but it's not the MLM structure that illegal, it's the fact that the main revenue source is the new member fees, rather than any actual value or profit.

There are non-pyramid scheme, reasonably legit MLMs, and the difference is: in a non-pyramid-scheme MLM, there is actually value being provided in exchange for the money that flows up, preferably at all levels. Even if no new sellers were recruited, and people just sold product, everybody would still be making money, and the organization would survive.

Lately, the most obvious way to tell the difference is that the more legit ones like Avon don't require new sellers to go into debt to start up - you sell from a catalog, or you don't have to pay for product unless it's sold, and you don't have to pay large fees for training or membership just to start selling - the training/set-up is free or a nominal cost for materials and travel. Also, in a sustainable MLM, the upper-level sellers are doing pretty intense mentoring/training/monitoring/support of the people under them, and are actually earning a lot of the money that flows up, because they want the people below them to succeed - it's a different structure but the same effect as money flowing up to management in a more standard structure. And nobody makes any money at all if the product doesn't sell, so usually there's incentive for the product to be something people want at a reasonable markup, and sellers can actually sell it.

There's still more risk to sellers and less chance of making a living wage, and often a fair amount of pressure tactics, but it's a reasonably workable business model long-term, and if people aren't making money, they can just quit with no big loss. (Really, it's just a more formalized version of how small home businesses sell by word-of-mouth in expanding social circles.) There was a recent Buzzfeed article about what Avon is up to lately that gives a pretty good view of how a non-scam MLM functions.

In a pyramid scheme, new sellers have to put up money up front, often for expensive training or something and are also often required to buy a very large amount of product on spec, which they can't return if they don't sell it. (This is very similar to the process of being "published" by a predatory publisher, and not essential to the MLM aspect.) This puts sellers under a huge amount of pressure just to make back their initial investment (and the vast majority of them don't), and generally forces people on higher levels to focus more on recruiting new sellers than mentoring existing ones, because nobody makes money on selling no matter how much mentoring is going on, because that's not the point of the thing, and since that's not the point, the product is probably shit and nobody can sell it anyway. (Often it's something like dietary supplements that's a swindle no matter how it's sold.) It's also why it's uniquely damaging to social relationships: you're not just selling to your friends, you're being coerced into actively swindling your friends, and usually before you've been in the thing for very long, you realize that, at some level, but you've invested so much you can't get out. It's poison all around.

MLMs are legal; pyramid schemes aren't. So the pyramid schemes have to have just enough of a 'product' to pretend they're a real MLM long enough to take the money and run, which makes them harder to talk people out of. And the problem isn't so much the MLM structure as that the whole thing's a swindle.

And we certainly have swindles in monetized fandom! Any method of making money can be turned into a swindle, by someone who wants to swindle people. We can probably all name several exciting chapters in the history of online fandom when fan swindlers have succeeded, for a little while at least.

And any method of making money can feel like a swindle if the people involved in it are just really bad at it (which also applies to a lot of v. small publishers who look predatory through sheer incompetence, but aren't actually making any money for themselves either.) We can all name situations like that too, probably.

And any profit-prioritizing corporation under late-stage capitalism is, at some level, built on a swindle, because our entire global economic system is currently built on a series of stacked swindles. So there's some stuff that does make me side-eye things like Patreon and Kofi, and what they try to promise people, even as fandom uses them more and more, but that's really pretty ancillary to the question of MLMs. And even at their worst, they don't require the initial outlay of capital to chain you to the swindle, or pressure you to pressure your friends to put themselves into the same level of debt as you.

So I'm still way more worried about predatory publishers going 'ooh, girls are selling fanfic now! Our fandom market's not limited to boys with no social support and WoW-with-the-numbers-filed-off epics!' or about homegrown swindles and for-pay fanfic sites than I am about people using crowdfunding or commissions to fill out that last couple of hundred dollars of rent. The real, ongoing problem with monetizing that destroys relationships is large corporations recruiting people to swindle other people for them, not individual fans looking for compensation for labor.

(The question of compensation for creative labor in general is an entirely different one.) (as is the question that's silently threaded through this whole discussions about helping needy people via pure charity vs. under a smokescreen of nominal 'earned payment', and whether that choice should be up to the helper or the helped.)(as is the question of to what extent patreon and company are themselves exploiting the fans who use them.)

(one of my cousins over christmas seemed to think I was anticapitalist or something, dunno what gave him that impression.)
recessional: a photo image of feet in sparkly red shoes (Default)

[personal profile] recessional 2019-01-29 07:06 pm (UTC)(link)
I am . . . so not even going into the other post because wow there are SO MANY assumptions at work about perspectives and focuses and what people even like going on in some of those threads (some of which like AHAHAHA NO, p2p is a nightmare waiting to happen), I can't even. But so that it doesn't itch at me:

I keep finding my perspective on these things grounded in music and professional-musician-life and shit, and am always so bemused at how . . .absent that perspective often seems to be otherwise. It's like there really is a very low overlap.

What fandom tends to do, in terms of what I see, is turn into buskers. It's not even "pass the hat" in the sense that when the hat gets "passed" there's a very strong obligation-feel that you need to put something in it: it's more that there is a hat, out in front, that people can toss stuff into if they feel the performance is worth the remuneration and they have it to toss.

And then (like buskers) sometimes a fan-creator will also have some adjacent product For Sale (like buskers will have albums), and sometimes you can (like buskers) commission them for a particular performance and hell, sometimes they even have a totally separate Concert Career (ie are professionally published).

It's just that for most fan-content it's really hard to get a physical hat out in a physical space, so (to me) what kofi and patreon and other things do is basically host your hat for you. Which isn't actually unlike busking EITHER (to busk in most cities or popular tourist areas or transit areas in Vancouver, you get a permit).
Edited 2019-01-29 19:06 (UTC)

(no subject)

[personal profile] recessional - 2019-01-29 21:02 (UTC) - Expand

(no subject)

[personal profile] chantress - 2019-01-31 19:00 (UTC) - Expand
kore: (Default)

[personal profile] kore 2019-01-29 07:56 pm (UTC)(link)
That's interesting, because I've noticed a bit of a shift from Kickstarter to Patreon -- Kickstarter depends so much on individual projects, and then if one goes viral a lot of the time the person can't manage supplying the demand on their own, or sometimes they just don't know what to do (Amanda Palmer was a big, criticized example of this). But with Patreon, people can do livestreams or Q&As or "you get my undying gratitude" levels, and it seems a lot less stressful. Sometimes people get stuck on thinking up rewards that aren't just extra projects, though.

(no subject)

[personal profile] recessional - 2019-01-29 20:27 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-29 21:00 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-29 20:29 (UTC) - Expand

(no subject)

[personal profile] sholio - 2019-01-29 23:12 (UTC) - Expand

(no subject)

[personal profile] sholio - 2019-01-29 23:44 (UTC) - Expand

(no subject)

[personal profile] elf - 2019-02-01 01:17 (UTC) - Expand
cyprinella: Comic character saying "Yay" with a thumbs up (yay!)

[personal profile] cyprinella 2019-01-29 08:56 pm (UTC)(link)
Yes, this is exactly the simile that occurred to me.
kore: (Default)

[personal profile] kore 2019-01-29 08:57 pm (UTC)(link)
"Let's go from Tumblr to P2P!" seems like a case of frying pan --> BONFIRE to me. What even??

(no subject)

[personal profile] recessional - 2019-01-29 20:58 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-29 21:15 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-29 21:23 (UTC) - Expand

(no subject)

[personal profile] minim_calibre - 2019-01-30 19:40 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 19:49 (UTC) - Expand

(no subject)

[personal profile] minim_calibre - 2019-01-30 20:53 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 21:08 (UTC) - Expand

(no subject)

[personal profile] minim_calibre - 2019-01-30 21:30 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 21:38 (UTC) - Expand

(no subject)

[personal profile] minim_calibre - 2019-01-30 21:47 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 22:06 (UTC) - Expand

(no subject)

[personal profile] havocthecat - 2019-01-30 20:36 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 20:38 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-30 22:20 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 22:21 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-30 22:54 (UTC) - Expand

(no subject)

[personal profile] sciatrix - 2019-01-31 23:04 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-29 21:16 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-30 02:33 (UTC) - Expand
novembermond: (sprinkledonuts)

[personal profile] novembermond 2019-01-29 07:13 pm (UTC)(link)
I have nothing intelligent to add, I just wanna say I enjoy reading your well thought out posts so much. ♥
batrachian: (Lurking Frog)

[personal profile] batrachian 2019-01-29 07:17 pm (UTC)(link)
+1
vicki_rae: (Default)

[personal profile] vicki_rae 2019-01-30 04:59 am (UTC)(link)
I have nothing intelligent to add, I just wanna say I enjoy reading your well thought out posts so much.

Same.
(deleted comment)

(frozen comment) (no subject)

[personal profile] saxonvoter - 2019-01-29 20:59 (UTC) - Expand
author_by_night: (Default)

[personal profile] author_by_night 2019-01-29 07:27 pm (UTC)(link)
I'd say as scammy as MLM can be, mostly it's just annoying. Or can be - I think it depends on how they're doing it. I've had friends do MLM (before it was even really known as that), and they weren't annoying about it.

The other question is, where do you draw the line? Because truth be told, ANY sort of marketing by a friend could be seen as "annoying", but social media is also where people do their marketing.
Edited 2019-01-29 19:29 (UTC)
kore: (Default)

[personal profile] kore 2019-01-29 07:50 pm (UTC)(link)
In a pyramid scheme, new sellers have to put up money up front, often for expensive training or something and are also often required to buy a very large amount of product on spec, which they can't return if they don't sell it. (This is very similar to the process of being "published" by a predatory publisher

Yeah, it's like that "money should flow towards the author" rule -- people shouldn't have to pay to get published, or reviewed, or to have inventory they can sell. The very latest iteration of this appears to be people who put videos up on UTU about how you, too! can be a gazillionaire reselling returned stuff from Amazon, with the result people wind up paying thousands of dollars for "training" and even more money for inventory they can't sell (and might not even know what it is before they buy IIRC). Or the "publishers" who tell you that you've won a prize, and all you need to do is pay $35 for the poetry anthology your poem appears in....that kind of thing.

And I remember my mother briefly selling Mary Kay in the eighties, and IIRC she either had samples she didn't have to pay for, or took around a catalogue or both. (No, Wiki just told me now you have to buy a $100 starter kit. Hunh. Maybe they changed or I'm remembering wrong. She certainly couldn't have afforded a starter kit at the time.)
Edited 2019-01-29 19:58 (UTC)

(no subject)

[personal profile] sholio - 2019-01-29 20:39 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-29 20:49 (UTC) - Expand

(no subject)

[personal profile] sholio - 2019-01-29 23:31 (UTC) - Expand
kore: (Default)

[personal profile] kore 2019-01-29 08:44 pm (UTC)(link)
In the spirit of "side issue comments" a thing that really struck me was I think I saw one (1) person saying, "Remember those disclaimers that used to be on every fic about how we were not making a profit and just playing, because people were afraid of getting SUED?" and in Ye Olden Days that would have been game set match, probably with an added anecdote about how if a writer sees an idea used in fanfic then they can't use it themselves, FOREVER. I don't have anything profound to say about that really, just that I was surprised it's basically disappeared as a concern, except for preserving AO3 as a non-profit organization so don't put a Ko-Fi link in your profile or author's note. I dunno whether that's because the culture at large is now more comfortable with transformative works as an idea, or because in this late capitalism stage it's okay because some people have made piles of money doing that, like with the Jane Austen zombie craze. (That was different because it was out of copyright, but from what I saw it was large chunks of Austen with some zombie action mixed in.)

(no subject)

[personal profile] recessional - 2019-01-29 21:04 (UTC) - Expand

(no subject)

[personal profile] rthstewart - 2019-01-30 03:26 (UTC) - Expand
dragoness_e: Living Dead Girl (Living Dead Girl)

[personal profile] dragoness_e 2019-01-30 03:32 am (UTC)(link)
probably with an added anecdote about how if a writer sees an idea used in fanfic then they can't use it themselves, FOREVER.

I remember that one--it was "accepted wisdom" that authors never read fanfiction because of that, based on a story by Marian Zimmer Bradley about being sued by someone because she'd looked at the woman's fanfiction and the woman then claimed she stole her story idea. Like the hot coffee lawsuit, IIRC when someone dug up the real details, it turned out to be bullshit. It wasn't "MZB looked at crazy fanfic writer's fic and was sued", it was more "original story for shared Darkover anthology was solicited, and never returned/acknowledged, and story elements later turned up in MZB's fiction". And we all know what a complete dirtbag MZB turned out to be, so I can easily believe she stole some unknown baby writer's work.

In real life, it turns out that more than a few SFF writers were fanfic authors before they were published, and some still write fanfic, very, very discreetly.

(no subject)

[personal profile] kore - 2019-01-30 03:39 (UTC) - Expand
alexseanchai: Katsuki Yuuri wearing a blue jacket and his glasses and holding a poodle, in front of the asexual pride flag with a rainbow heart inset. (Default)

[personal profile] alexseanchai 2019-01-29 09:02 pm (UTC)(link)
I don't have brain to contribute to this discussion (except via snarking at [personal profile] inklessej there, which I 'spect you, [personal profile] melannen, would rather I did not do), but like:

(one of my cousins over christmas seemed to think I was anticapitalist or something, dunno what gave him that impression.)

pffffffff hahahahahaaaaaaaa

(no subject)

[personal profile] dragoness_e - 2019-01-30 03:25 (UTC) - Expand

(no subject)

[personal profile] attie - 2019-01-31 06:04 (UTC) - Expand

(no subject)

[personal profile] megpie71 - 2019-01-30 08:18 (UTC) - Expand

(no subject)

[personal profile] bell - 2019-01-30 12:05 (UTC) - Expand

I'm squee'ing

[personal profile] jesse_the_k - 2019-01-30 18:00 (UTC) - Expand
topaz_eyes: (blue cat's eye)

[personal profile] topaz_eyes 2019-01-29 10:11 pm (UTC)(link)
(here via my network)

Imho there's a point which keeps getting lost in these conversations, one I've seen maybe touched on once or twice, but nothing in-depth. Fanworks are transformative, yes, absolutely. That does not mean fans have the legal right to sell them. "Transformative use" is currently a fair-use exception under copyright law only. It does not change the fact that it still infringes on the original creator's right to profit exclusively from their work.

The AO3 won't allow fan creators to link to their Patreons, Kofis, or other fundraising sites, because the OTW can't afford to be seen as endorsing fan creators profiting off of IP infringement. Period. It's not just copyright infringement the OTW has to worry about either; there's also trademark infringement, which is a different (and imho scarier) kettle of fish. There's a reason why most popular genre works (e.g. Harry Potter, MCU, DCEU) are trademarked these days as well.

I've seen what can happen when fans try to sell their fanworks outside of fandom spaces. I spent a lot of time on Etsy forums in the past. I was surprised by the number of shop owners, many of whom were fan creators selling fannish works, who came to the forums to complain about items removed from their shops for IP infringement. If they received enough DMCA infringement notices their shop was closed permanently and they were banned from selling on Etsy again. They didn't get much sympathy on the Etsy forums, either. They were seen as direct competitors by Etsy sellers who sold their own original (IP-protected) work.

The only ways for fanworks not to infringe are 1) transform works from the public domain, 2) transform IP-protected works to the point that the source is unrecognizable (by that point, it's its own original work anyway), or 3) obtain permission / purchase a license from the IP holder to sell, which can cost obscene amounts of $$$ and/or meet stringent requirements (why hello there Disney). Most fan sellers who were dinged, sold unlicensed fanworks that were instantly recognizable and were therefore a target. (Which was and is a shame, because there are some really creative works, stuff you could never get as "official" merch.) No one can predict whether IP holders will look the other way re fanworks, or pounce on a seller. My guess is that it depends on a) how much profit the IP holder stands to lose, or b) when they want to set an example. (Disney is notorious for this.) A lot of fan creators don't know any of this, and they get blind-sided.

Current IP laws are ridiculous and weighted far too heavily on the side of IP holders (which more and more are corporations, not individuals). They need to be replaced by fair and reasonable laws that recognize and appreciate the value of transformative works and the public domain. Until that happens, fans can't ignore the real legal consequences of selling infringing works.

(no subject)

[personal profile] dragoness_e - 2019-01-30 03:37 (UTC) - Expand

(no subject)

[personal profile] elf - 2019-01-30 19:05 (UTC) - Expand

(no subject)

[personal profile] ldybastet - 2019-01-30 22:32 (UTC) - Expand

(no subject)

[personal profile] dragoness_e - 2019-01-31 02:50 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-31 04:06 (UTC) - Expand
alasse_irena: Photo of the back of my head, hair elaborately braided (Default)

[personal profile] alasse_irena 2019-01-29 11:49 pm (UTC)(link)
I don't have a heap to add, but this has been interesting and educational in several ways.

I would always feel weird selling fanwork, because *I* would feel guilty about making the profit when someone else had contributed to the work. I don't necessarily think I'm correct here; it's just a personal hang up I have, and coupled with the copyright questions, it just doesn't seem to be worth the risk to me...

(no subject)

[personal profile] alasse_irena - 2019-01-30 06:47 (UTC) - Expand

(no subject)

[personal profile] recessional - 2019-01-30 20:46 (UTC) - Expand

(no subject)

[personal profile] slashmarks - 2019-01-30 23:30 (UTC) - Expand

(no subject)

[personal profile] slashmarks - 2019-01-31 00:58 (UTC) - Expand
fairestcat: Dreadful the cat (Default)

[personal profile] fairestcat 2019-01-30 04:31 am (UTC)(link)
I really appreciated your comments on the original post, and I really agree with your comments here.

The real, ongoing problem with monetizing that destroys relationships is large corporations recruiting people to swindle other people for them, not individual fans looking for compensation for labor.

Because THIS, OMG THIS.

(no subject)

[personal profile] recessional - 2019-01-30 21:41 (UTC) - Expand

(no subject)

[personal profile] kore - 2019-01-31 04:08 (UTC) - Expand
vicki_rae: (Default)

[personal profile] vicki_rae 2019-01-30 05:06 am (UTC)(link)
I have nothing intelligent to add, I just wanna say I enjoy reading your well thought out posts so much.

Same. This whole thread is really interesting.
jesse_the_k: Large exclamation point inside shiny red ruffled circle (big bang)

I'm loving this post so hard!

[personal profile] jesse_the_k 2019-01-30 05:46 pm (UTC)(link)
...and I'm thrilled that I'm here from [community profile] thisweekmeta.
ghost_lingering: a pie is about to hit the ground (Default)

[personal profile] ghost_lingering 2019-01-31 03:44 am (UTC)(link)
Just want to swing by and give this post a high-five.
elanya: Sumerian cuneiform 'Dingir' meaning divine being/sky/heaven (Default)

[personal profile] elanya 2019-02-01 03:01 pm (UTC)(link)
Man, this is such a great breakdown - I really appreciate it!

I have such mixed feelings about MLMS, even though I know some people who have been exceedingly successful with them financially and find the structure extremely personally rewarding because they've become invested in that mentorship structure. But for every one of them I know, there's half a dozen others for whom it didn't work out that way.

In fandom, I think you are right, about about the risks of people being taken advantage of by large corporations, and I do think it is worth examining the motivations and incentives for the companies that provide the services that enable the commercialization/commodification of fan labour, whether that's patreon or Ko-fi or redbubble or whoever, and all your other parentheticals at the end of the post :x
elanya: Sumerian cuneiform 'Dingir' meaning divine being/sky/heaven (Default)

[personal profile] elanya 2019-02-01 03:02 pm (UTC)(link)
also man I had this tab open for a day or so and now that I finally got around to writing and posting my comment man there is a lot more discussion to read back through :x